Extracellular mediators, such as growth factors (BMP; FGF) and hormones (PTH; vitamin D; leptin), are involved in maintaining the quiescence and regulating the proliferation, fate determination, and differentiation of marrow-derived mesenchymal stem cells (MSC). Recent studies of genetically engineered mice also support extracellular matrix (ECM) proteins as determinants of MSC physiology. Specifically, a functional group of ECM molecules, matricellular proteins (MP), appear to modulate the quantity of MSC. MP are multifunctional proteins that bind to cells, growth factors, extracellular enzymes, and the stnmtural matrix. Thrombospondin-2 (TSP2) is a trimeric, multidomain MP that acts in an autocrine loop to limit MSC proliferation. Thus, TSP2-null mice have an increase in MSC number and an increase in endosteal bone formation. The primary goal of this project is to utilize the well characterized relationship between TSP2 and MSC as a model to explore fundamental questions regarding the role of MP in regulating MSC function. Recent studies have shown that in addition to acting as an inhibitor of proliferation, TSP2 inhibits adipogenesis and promotes osteoblastogenesis. Thus, in specific aim one, we will study whether the effects of TSP2 on differentiation are independent of proliferation inhibition by using various truncated and modified recombinant TSP2 proteins and by examining differentiation of growth-arrested MSC. Furthermore, we will examine whether TSP2 can function to shift differentiated adipocytes to osteoblasts. In specific aim two, we will study the temporal and spatial requirement of MP in the endosteal compartment. We will generate mice with a TSP2 transgene that is activated in response to Cre-mediated removal of an upstream beta-gal gene. By crossing these mice with mice that express Cre in a temporal- and spatial- specific manner in the endosteal compartment, we can determine the contextual influence of MP on MSC-lineages. In conjunction, we will examine changes in TSP2 expression in response to osteogenic and osteopenic stimuli using a transgenic mouse expressing a fluorescent eYFP reporter from the TSP2 promoter. In the final specific aim, potential interacting effects of MP will be studied. The impact of TSP1 and SPARC on TSP2 function will be determined by characterizing MSC and whole bone function in double knockout mice. Potential synergistic, negative, or dominant effects will be explored. In preliminary studies, the absence of TSP2 appears to be a dominant effect relative to both TSP1 and the functionally-related molecule SPARC. Through these studies we seek to develop a new paradigm for the regulation of MSC function which will guide the development of therapies aimed at increasing endosteal bone mass in conditions of osteopenia.